Byju's update: Embattled edtech giant downing shutters?

In a strategic move amid mounting financial challenges, edtech company Byju's has shuttered all of its offices across India except for its headquarters in IBC, Knowledge Park, Bengaluru.

Sources say that the decision, asking employees to WFH (work from home), is part of Byju's India CEO Arjun Mohan's restructuring plan.

“This has been in the works for over six months. The company has been shutting down offices across the country as soon as the lease for each expired,” a source familiar with the matter was quoted by the Hindu Business Line as saying.

Per this new directive, all employees will now work from home indefinitely, with the exception of those operating from approximately 300 Byju's tuition centres across the nation.

In addition, the company has downsized its office space in Bengaluru too, vacating its Prestige Tech Park premises.

This restructuring initiative comes amidst a challenging period at Byju's, as it grapples with issues regarding the validity of funds raised from a recent rights issue.

Notably, the company has had to delay salary payments to its approximately 14,000 employees, with full disbursement still pending.

Byju's blames the fund crunch on restrictions upon utilising the $200 million raised through its last rights issue, as it awaits clearance from the National Company Law Tribunal (NCLT).

In a recent ruling, the NCLT directed Byju's to hold the proceeds from the rights issue in escrow, following objections raised by four major investors. The tribunal has also directed the company to respond to insolvency petitions filed by US lenders and the Board of Control for Cricket in India (BCCI).

The edtech giant's woes have only been escalating, as evidenced by the outcomes of a recent extraordinary general meeting (EGM) convened by investors of Think and Learn, Byju's parent company.

During the EGM, resolutions were passed, including the removal of CEO Byju Raveendran from his position and changes to the company's board, which currently includes his wife and co-founder Divya Gokulnath and his brother Riju Raveendran.

Byju's drastic measures underscore the intense challenges it now faces on various fronts, signalling a pivotal period for the once-thriving edtech juggernaut.